A very vital declaration of the law by the Supreme Court earlier this month provides much-needed relief to senior bank officials, who ran the risk of being thrown under the bus in the course of investigations into the affairs of companies to whom the bank had lent money.
Section 339 of the Companies Act, 2013 entails personally holding responsible persons who were “knowingly parties to the carrying on of the business” of the company with an intent to defraud creditors of the company without any limitation of liability, for all or any of the debts or other liabilities of the company.
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